Brazil takes lion's share of Galp capex

Tuesday, February 21, 2017

The bulk of this year's capex for Portugal's Galp Energía will go to Brazil, CFO Filipe Silva announced on Tuesday.

Over 70% of 2017 forecast spend of 1bn-1.2bn euros (US$1.06bn-1.66bn) will go to Brazil block BM-S-11, primarily Lula work, Silva said during Galp's capital markets day.

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Company E&P executive director Thore Kristiansen added that first oil from Lula South is expected by the end of the first quarter, and first oil from Lula North by end-2017/early-2018.

Brazil projects due online in 2018 are Berbigão/Sururu and Lula South extension; Atapu 1 in 2019; Sépia East in 2020; and Júpiter, Carcará, Atapu 2 and Lula West from 2021 onward.

Kristiansen highlighted lower shorter ramp-up periods for Brazil FPSOs supported by higher productivity and faster well connections.

On the exploration front, Galp this year plans 3D seismic across all Potiguar basin blocks and to drill the Guanxuma well on block BM-S-8.

"Brazil is giving positive signs to the industry, is taking the adequate measures that will strengthen the oil and gas industry," said CEO Carlos Gomes da Silva.

Galp's Brazil 4Q16 production rose year on year to 75,800boe/d due to the contribution of FPSOs #4, #5 and #6, according to the company's latest earnings report.